Wall Street's Wish List

"Actions speak louder than words."

It's an old saying, with more than a grain of truth to it, I'll warrant. So why is it that when the Wall Street firms merely "initiate coverage" or "upgrade" their ratings on a company, that gets all the news coverage? After all, those are only words, when what really matters is how the big boys act. Luckily for Wall Street watchers, finding out which professionals put their money where their corporate mouthpieces are has become relatively easy in this Internet age of ours. All we have to do is read MSN Money's list of which companies the Street is most actively buying.

But once we've done that, what next? After all, "Monkey see, monkey do" may not make for the soundest of investment strategies. That's where Motley Fool CAPS can help. The Fool's newest venture into the realm of collective intelligence collects ratings from more than 19,500 lay and professional analysts (and counting), then overweights the most successful raters' opinions to come up with a "CAPS rating" from one to five stars (five being the best). If Wall Street's buying and the smartest investors in Fooldom say they're right to do so, then that should get your attention.

And so, let's meet today's list of contenders:

Companies are selected from the "Institutional Ownership Up Last Month" list published on MSN Money on the Saturday following close of trading last week. Price increase and current pricing also provided by MSN Money on the same date. CAPS ratings from Motley Fool CAPS.

Chickens and eggs
Another well-worn saw asks us: Which came first, the chicken or the egg? As you've noticed by now, one characteristic that each of these stocks has in common is that they've experienced dramatic price increases over the last 30 days. But are the Wall Streeters buying because the stocks have gone up -- playing the momentum game -- or is their heavy buying causing the prices to spike? It could even be a combination of the two, a vicious circle of some buyers pushing the price up, and others hopping aboard the bandwagon and enjoying the ride.

Are these chickens' wings clipped?
Transportation was the flavor of the week on Wall Street, as traders were preoccupied with snapping up the shares of the three airlines named above, as well as one more (Northwest, which we don't cover on CAPS because it's currently in bankruptcy). For those few who feared to take a flyer on an airline, railways and rubber fit the bill quite nicely.

But was this just because all the Wall Street traders were heading back to the office after the holidays, and had transportation on their minds, or might there be more to their sudden interest in "planes, trains and automobiles"? For today's peek into the world of CAPS, let's examine Wall Street's least popular pick, MAIR (as in Mesaba AIR) Holdings, and see what investors are saying about it:

• CAPS legend downwithpumpers, who regularly places in or near the top 10 players out of 19,500 registered CAPS users, sums up the bear thesis laconically: "Traffic down, losses up, price up."
• In contrast, CAPS newcomer wipilot -- who incidentally also rates the stock an underperformer -- mentions the bull thesis in passing: "Once NWA comes out of bankruptsy [sic] as a much stronger comapny [sic], MAIR will ride the wave. Until then it will underperform."

Typos aside, wipilot has a point. Regional carrier MAIR does work as a "Northwest Airlink partner," and who else has Wall Street been buying a lot of lately? You guessed it: Northwest. Perhaps the reason for all the optimism is that the major investment houses think Northwest will soon emerge from bankruptcy, and agree with wipilot that this will benefit MAIR.

Is that enough of a reason to buy a company whose traffic is down, and whose losses are up? downwithpumpers thinks not -- but we want to know what you think. You see, at Motley Fool CAPS, it doesn't matter if your name has a "TMF" in front of it, or a "CFA" after it. Unlike Wall Street, we welcome all comments in CAPS, where the best arguments -- and the best records -- carry the day.

Fool contributor Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked 148 out of more than 19,500 raters. The Fool has a disclosure policy.